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Accelerating the Just Energy Transition: Challenges and opportunities for regions

Indonesia’s Just Energy Transition Partnership (JETP) Comprehensive Investment and Policy Plan (CIPP) was launched on August 16, 2023. To achieve an inclusive transition, the preparation of the CIPP would need to involve the participation of multiple stakeholders, including local governments.

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However, many local governments were not aware of the JETP process or included in it, as revealed by joint research from Yayasan Indonesia CERAH and the Centre for Economic and Law Studies (CELIOS). The research conducted exploratory case studies in three regions, namely Langkat in North Sumatra, Cilacap in Central Java, and Probolinggo in East Java. The in-depth analysis also focuses on the readiness of these regions, exploring how the closure of coal-powered infrastructure and coal mines will impact the local economy.

The coal plant retirement plan may potentially cause regions to lose between 1.2% and 6.4% of their direct revenue, depending on local economic structures. The mitigation steps for potential economic loss include promoting investments in renewables to substitute income from coal. On the employment front, local governments need to not only fund worker compensation but also encourage upskilling.

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